Business in North wants rates to hold at 4%

Business leaders in the North want the Bank of England to leave interest rates on hold today, at a 37-year low of 4 per cent.

The Bank's monetary policy committee will conclude its monthly rate policy meeting today amid growing concerns from industry that it is edging towards a rate rise.

The bank has warned it might move to curb consumer spending - a key driver of UK economic growth in recent months. The rapid rise in house prices in the UK during December may also influence the bank to increase rates this month, economic analysts said.

Seven consecutive rate cuts last year in the UK have, according to Mr John Stringer from the Northern Ireland Chamber of Commerce, helped readdress the balance in favour of industry.

Unemployment has risen slightly in the North over the last quarter, but is expected to rise steeply this month when recent job losses appear in government statistics.

The Institute of Directors believes Northern Ireland firms are vulnerable to sudden rises in rates.

Mr Nigel Smyth of the Confederation of British Industry in the North said there was no reason why there should not be a further quarter percentage point cut in interest rates. But the Northern Ireland Chamber of Commerce said a rate rise this month would be seen as a blow to struggling businesses.